Sensex gets a banking scare, takes 255-point knock

Mumbai: Bad loan worries came back to haunt market as the Sensex slid for the second day by plunging 255 points, led by banking stocks after Axis Bank's sharp drop in quarterly profit suggested all is not well on the NPA front.

Weak global leads following tumbling oil prices and the recent developments involving the Tata group after the ouster of Cyrus Mistry as its chairman cast their shadow too.

The 30-share index cracked below the 28,000-mark and closed at 27,836.51 points, down 254.91 points, or 0.91 percent. The barometer had lost 88 points in the previous session.

Representational image. PTI

The 50-share NSE Nifty settled lower by 76.05 points, or 0.88 percent, at 8,615.25. Intra-day, it shuttled between 8,596.60 and 8,657.30.

Investors remained cautious as October month series in the derivatives segment is set to expire tomorrow.

"Unsurprisingly, banks led the falls today, and with more banks about to announce Q2 figures, investors are waiting to see if Axis' numbers can be dismissed as a one-off case," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.

Tata group stocks such as Tata Motors, Tata Steel and TCS all continued to reel and registered further losses by up to 4.27 percent.

Sentiment remained off-colour as Asian shares mostly retreated, hit by falling oil prices amid fresh fears after reports emerged that Russia will not take part in a planned oil output cut by major producers, brokers said.

Key indices in France, Germany and the UK were lower by up to 1.04 per cent.

"If recent gains in banks rode on hopes that we were at the end of NPA cycle, Axis' numbers have forced a rethink on the same... This, read along with selling mode that FIIs have been employing in equities in the last fortnight, investors are obviously taking a cautionary route ahead of US presidential election and Fed rate decision," added James.

Bucking the trend, ITC rose 0.06 percent after the company posted 10.49 percent increase in standalone net profit for the second quarter ended September.

Bharti Airtel ended 2.25 percent higher even as the company posted a 4.9 percent drop in consolidated net profit at for July-September.

The market breadth remained negative as 1,593 stocks lost, 1,179 closed higher while 242 were steady. The total turnover on BSE hit Rs 3,597.50 crore, up from Rs 2,987.80 crore during the previous trading session.